BEHIND THE NUMBERS
How this calculation works
Variable cost per sale = product cost + fulfilment + fixed transaction fee + selling price × fee %. Contribution = price − variable cost. Profit = contribution × volume − fixed costs. For positive contribution, break-even units = ceiling(fixed costs ÷ contribution); target units = ceiling((fixed costs + target profit) ÷ contribution).
Worked example
Each £50 sale contributes £20 after £30 variable cost. Five hundred sales cover £10,000 fixed costs; 600 sales earn £2,000. A £5,000 profit needs 750 sales.
Example result: £20.00
Include costs that follow each sale
Postage, packaging, card fees and sales commissions can turn an apparently healthy product margin into a small contribution. Keep fixed salaries and rent in period fixed costs.
Break-even uses whole units
The required volume is rounded up because a fraction of a sale cannot pay the remaining fixed cost. The profit shown at your entered volume is kept separate from this threshold.
Assumptions and rounding
- A single product or stable per-unit mix with constant price and costs.
- Each unit represents one transaction for the entered fixed payment fee.
Questions about this calculator
Can a loss-making sale break even at a higher volume?
Not under this constant-cost model. Each extra negative-contribution sale increases the loss.
Is contribution the same as net profit?
No. Period fixed costs still have to be paid from total contribution.